From 2020 to 2050, industrial use will make up more than 75% of natural gas demand growth as prices remain low versus historical levels over the next 30 years, according to the U.S. Energy Information Administration (EIA).
As economic growth figures to drive U.S. industrial output, the industrial sector is expected to grow annual natural gas consumption by 3.6 Tcf, or 35%, from 2020 to 2050, the agency said in a research note published Tuesday. That would account for over 75% of the total 4.6 Tcf increase in domestic natural gas consumption forecast for the 2020 to 2050 timeframe.
The bulk chemical industry is expected to account for 45% of the increase in industrial consumption during the projection period, increasing by 1.6 Tcf through 2050.
Under the reference case in EIA’s recent Annual Energy Outlook 2021 report, overall U.S. consumption of natural gas is expected to rise to 35.7 Tcf in 2050, while domestic natural gas production is forecast to increase to 43.0 Tcf.
“EIA expects that exports will rise as production outpaces consumption throughout the projection period,” researchers said.
EIA projections show natural gas consumption in the power sector increasing to 12.1 Tcf in 2050, up 0.4 Tcf from 2020.
Power sector consumption is set to fall to 9.9 Tcf in 2021 on higher natural gas prices before increasing slowly until 2027 on expected growth in natural gas-fired generation capacity “and because of new, more energy-efficient combined-cycle turbine systems. These systems limit growth in power consumption” due to their efficiency compared to older combined-cycle units and other fossil-fuel powered generators, EIA said.
After 2040, the U.S. transportation sector is expected to account for an increase in natural gas consumption as the fuel gets more use for heavy-duty vehicles and freight rail.
Meanwhile, residential consumption is forecast to remain nearly flat, and improved energy efficiency is expected to limit consumption growth for commercial buildings, the agency said.
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